9 Months Months ,257 7, Sales (1,000 t) ,7%

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1 Porto Alegre, November 8 th, 05 GERDAU S.A. CONSOLIDATED 05 First Nine Months Results Brazilian Corporate Law Highlights Gross revenue Consolidated gross revenue in the first nine months of 05 reached R$ 19.5 billion, an increase of 11.3% over the same period in 04. The main contributors to this increase are the consolidation of the North American units acquired on November 04 (North Star Steel), the improved performance of the South American operations and the greater volume exported in 05. The Brazilian operations contributed with 52.2% of the revenues of the period (R$ 10.2 billion), the North American companies with 43.1% (R$ 8.4 billion) and those in Chile, Uruguay and Argentina with 4.7% (R$ million). Revenues generated by companies abroad added to Brazilian units exports represented 60.8% of the consolidated gross revenues in the first nine months of 05. Net Profit In the period between January and September 05, the net consolidated income reached R$ 2.5 billion, 1.2% greater than in the same period in 04. The operations in Brazil presented a net income of R$ 1.9 billion, 22.7% greater than that of the first nine months of 04. In North America net profit reached R$ million compared to R$ million, and in South America, excluding Brazil, of R$ million compared to R$ million. The net consolidated margin in the first nine months of 05 was 15.4%. Exports Shipments to clients abroad out of Brazil accumulated 2.1 million metric tons through September this year, 11.0% greater than that of the same period in 04. These shipments generated revenues of US$ million compared to US$ million in the previous year. EBITDA The operational cash generation through September as represented by EBITDA (gross profit minus SG&A plus depreciation and amortization), reached R$ 3.9 billion. This total represents 23.7% of net revenues. Output The output of slabs, blooms and billets in nine months reached 10.3 million metric tons, presenting an increase of 2.8% compared to the same period in 04. Output of rolled products in the same period reached 8.0 million metric tons, 3.6% greater than the volume for the same period in 04. Main data Output (1,000 t) Slabs, blooms and billets (SBB) Rolled products 9 Months 05 10,257 7,966 9 Months Sales (1,000 t) ,7% 2.8% 3.6% Gross Revenues (R$ million) 19, % Net Revenues (R$ million) 16, % EBITDA (R$ million) 3, (9.2%) EBTDA (R$ million) 4, % Net Profit (R$ million) 2, % Shareholders Equity (R$ million) 9, % Total Assets (R$ million), % Gross Margin 27.1% 32.4% EBITDA Margin 23.7% 29.0% Net Margin 15.4% 16.9% Net profit/shareholders Equity (ROE) % 42.8% Net Debt / Net total capitalization.9% 35.9% Net debt / EBITDA 2 0.5x 0.8x 1) Last 12 months net profit over shareholders equity. 2) Last 12 months EBITDA. 1

2 Third quarter dividends Dividends pertaining to the third quarter will be paid on November 30 th. Based on shareholdings held on the 18 th of November, shareholders of Metalúrgica Gerdau S.A. will be paid R$ 92.5 million (R$ 0.75 per share) and those of Gerdau S.A. R$ million (R$ 0.45 per share). Dividends for the first three quarters of the year totaled R$ million at Metalúrgica Gerdau S.A. and R$ million at Gerdau S.A. The dividend yield (dividends per share of the last four quarters/stock quote on November 4 th ) and of 8.6% and of 6.4% per year, accordingly. Gerdau takes control of Sipar Gerdau signed an agreement in September for the acquisition of 35.98% of shares issued by Sipar Aceros S.A., long steel rolling mill located in Province of Santa Fé, Argentina. This stake added to the 38.46% already owned by Gerdau, represents 74.44% of the stock capital of Sipar Aceros S.A. The disbursement for this additional stake will be of US$.5 million throughout the next three years. Stake in Diaco reaches 57.1% - At the end of the third quarter, Gerdau concluded the acquisition of a 57.1% stake in Diaco S.A., the largest rebar manufacturer in Colombia. The investment was US$ 75.2 million. Balance Sheet consolidates new acquisitions With the conclusion of the acquisition process mentioned above, the balance sheet consolidated on September 30 th includes all the assets and liabilities of Sipar and Diaco. Given that these operations were concluded at the end of the third quarter, the financial results of the period and the accumulated year-to-date reflect the proportional consolidation of Sipar (38.5%). Both will be consolidated in full in the fourth quarter. Perpetual Bond Issue - Gerdau S.A. concluded the issuance of its first Guaranteed Perpetual Senior Securities on September 22 nd, for a total of US$ 600 million. Interest will be of 8.875% per year, to be paid on a quarterly basis starting December 22 nd 05. Gerdau S.A. may redeem these titles on September 22 nd, 10 or as of this date at every interest payment. This operation got a Ba1 rating (stable) from Moody s Investor Service, Inc., BB- (stable) from Standard & Poor s and BB- (stable) from Fitch Ratings. Issue of euro commercial paper On October 12th Gerdau concluded its third issue of euro commercial paper in a total amount of US$ 0 million, with maturity on October 11th 06 and interest at 5.0% per year. Anefac-Fipecafi-Serasa Award Gerdau has been a top 10 nominee for the sixth consecutive year at the Anefac-Fipecafi-Serasa Award Transparency Trophy for the best accounting reports in 04. Eligible for the award are all companies based in Brazil and selected among the top 500 largest and best private companies in the fields of commerce, industry and services, except for financial services in addition to the top 50 state-owned companies. The evaluation criteria include: quality and degree of information, disclosure, adherence to accounting principles, layout, readability, concision, clarity and the disclosure of information not legally required such as cash flow statement, value added, EBITDA and Social Balance. 2

3 Third Quarter 05 Performance Gerdau S.A. - Consolidated Output and Sales Output of slabs, blooms and billets in the third quarter of 05 at the Gerdau companies reached 3.3 million metric tons, a volume 6.2% lower than that of the second quarter and reflect an adjustment in output relative to demand and company inventories. Output in nine months reached 10.3 million metric tons, presenting an increase of 2.8% compared to the same period in 04. The Brazilian operations contributed with 50.6% to the accumulated output for the year, while the North American operations contributed with 46.1% and the South American operations (Brazil excluded) with the remaining 3.3%. The increase in the first nine months of 05 compared to the same period in 04 is a consequence of the incorporation of the new North American units last November. Output 9 Months 9 Months 3Q05 2Q05 (1,000 metric tons) Crude Steel (slabs, blooms and billets) Brazil 1, ,751.1 (5.7%) 5, ,431.0 (4.4%) North America 1, ,618.0 (7.2%) 4, , % South America (0.5%) % Total 3, ,480.8 (6.2%) 10, , % Rolled Products Brazil 1, % 2, ,312.3 (10.3%) North America 1, ,567.6 (5.3%) 4,6.7 4, % South America % % Total 2, ,686.9 (2.8%) 7, , % The output of rolled products in the quarter totaled 2.6 million metric tons, 2.8% less than that of the second quarter. The units in Brazil saw output increase of 0.7%. The other South American countries (Chile, Argentina and Uruguay) had an increase of 0.5%, with volumes reaching 1.0 million metric tons and thousand metric tons, respectively. Output in North America reached 1.5 million metric tons, a decrease of 5.3%, as a consequence of the temporary stoppage at the Beaumont, TX unit, and due to adjustments in output relative to company inventories. From January through September rolled product output reached 8.0 million metric tons, 3.6% greater than that of the same months in 04. 3,229 Output of Blooms, slabs and billets (1,000 metric tons) 3,411 3,341 3,467 3,512 3,481 3,264 2,460 2,591 Output of Rolled Products (1,000 metric tons) 2,641 2,583 2,667 2,687 2,612 Brazil Abroad Brazil Abroad Third quarter consolidated sales totaled 3.4 million metric tons and remained at levels similar to those of the second quarter. Of this total, thousand metric tons were exported from Brazil, and 1.9 million metric tons were shipped by companies abroad and represent 73.0% of the volume shipped in the period. 3

4 Shipments 9 Months 9 Months 3Q05 2Q05 (1,000 metric tons) Brazil Domestic market % 2, ,073.0 (13.4%) Exports (21.8%) 2, , % Total 1, ,672.3 (8.0%) 4, ,000.2 (4.0%) Abroad North America 1, , % 4, , % South America (3.8%) % Total 1, , % 5, , % Consolidated Total 3, ,416.4 (0.6%) 10, , % The months of January through September saw consolidated sales reach 10.2 million metric tons, presenting an increase of 7.7% compared to the same period in 04 due to the improved performance of the South American operations (ex-brazil) and to the new North American units. In Brazil, as a consequence of the decrease in shipments to the domestic market (-13.4%) throughout the year, exports increased 11.0%, reaching 2.1 million metric tons (US$ million) in the period. It is worthwhile remembering that the long steel inventories with consumers and distributors are now back to normal at historical levels which should lead to a better balance between supply and demand in the future. Results 3,148 3,134 Shipments (1,000 metric tons) 3,171 3,107 3,374 3,416 3,395 Domestic Market Exports Abroad Net revenues reached R$ 5.1 billion in the third quarter this year, 6.3% less than in the second quarter, due to the appreciation of the Brazilian currency in the period which had a negative impact on revenues generated in U.S. dollars both with exports and from operations abroad, when converted into reais. Year-to-date net revenues (R$ 16.4 billion) increased 11.3%, basically reflecting the increase of 7.7% in tonnage shipped in the period. Operations in Brazil contributed with R$ 7.8 billion to net revenues of the first nine months of the year, 47.4% of the total. Business in North America generated revenues of R$ 7.8 billion and the South American units R$ million, 47.8% and 4.8%, accordingly. Net Sales Revenue 9 Months 9 Months 3Q05 2Q Brazil 2, ,669.4 (9.5%) 7, , % North America 2, ,507.3 (3.3%) 7, , % South America (2.7%) % Total 5, ,435.4 (6.3%) 16, , % Gross profit reached R$ 1.4 billion in the third quarter allowing for a gross margin of 26.8% in the period remaining at the same levels of the preceding quarter. Year-to-date, gross margin reached 27.1%. SG&A (R$ million) increased 34.1% in the quarter, a consequence of cost increases in the long term incentive program at Gerdau Ameristeel. Although there was an atypical increase in these expenses in the quarter, the percentage for nine months of SG&A on top of net revenues remained relatively stable at 5.0%. 4

5 Net Sales Revenue per ton (R$ per metric ton) Gross Margin (%) ,460 1,303 1,214 1,625 1,570 1, % 38.2% 9.6% 37.2% 30.3% 16.1% Brazil North America South America Brazil North America South America Obs.: The prices on the graphs above are influenced by the change in the product mix and by the FX variations of the period. EBITDA 9 Months 9 Months 3Q05 2Q Brazil (15.4%) 2, ,743.6 (7.6%) North America (9.3%) 1, ,325.7 (13.6%) South America % (0.7%) Total 1, ,313.1 (12.8%) 3, ,263.7 (9.2%) Operating cash flow represented by EBITDA reached R$ 1.1 billion in the third quarter, representing a margin of 22.5% in the period. Through September this year, EBITDA reached R$ 3.9 billion and the margin 23.7%. EBITDA EBITDA Margin (%) 1,715 1.,65 1,289 1,415 1,313 1, Brazil North America South America % 30.3% 31.2% 24.6% 14.4% 10.1% Brazil North America South America Obs.: The EBITDA in reais (R$) of companies abroad are influenced by FX variations The financial result for the quarter (financial expenses minus financial revenues) was positive R$ million, due to the return on financial investments and to the favorable impact of the appreciation of the real vis-à-vis the U.S. dollar on debt denominated in foreign currency by companies headquartered in Brazil. Revenues with FX and monetary variations included in the financial results totaled R$ million in the quarter. EBTDA 9 Months 9 Months 3Q05 2Q Gross profit 1, ,458.4 (6.3%) 4, ,761.3 (6.8%) Cost of sales (128.0) (126.4) 1.3% (371.8) (327.7) 13.5% General/administrative expenses (305.3) (227.6) 34.1% (825.5) (745.4) 10.7% Depreciation & amortization % % EBITDA 1, ,1 (12.8%) 3, ,263.7 (9.2%) Net financial expenses (excluding FX and monetary variations) 25.8 (103.7) - (166.0) (225.1) (26.3%) FX and monetary variations (27.2%) (33.4) - EBTDA 1, ,4 (7.0%) 4, , % The impact of the appreciation of the real vis-à-vis the U.S. dollar had a positive impact on indebtedness, but was negative with regards to investments abroad. This resulted in an equity pick 5

6 up of minus R$ million in the quarter. This total includes fiscal incentive reserves and goodwill amortized in the period. Net profit reached R$ million in the third quarter of 05, presenting a net margin of 15.9%. From January through September, accumulated net profit reached R$ 2.5 billion, an increase of 1.2% over the same period in 04 and net margin of 15.4%. Net profit 9 Months 9 Months 3Q05 2Q Brazil (6.3%) 1, , % North America (21.0%) (38.4%) South America (14.1%) (22.8%) Total (9.1%) 2, , % Investments Fixed asset investments in the third quarter totaled US$ million, destined mostly to the construction of the new mill in Araçariguama (SP), to the expansion of the installed capacity at the Ouro Branco (MG) mill and to the mills in North America. Investments for the nine months total US$ million. Investments (US$ millions) 3Q05 2Q05 9 Months 05 Brazil 131,2 139,4 410,4 Abroad 47,7 50,6 132,4 North America 42,4,4 114,4 South America 5,3 10,2 18,0 Total 178,9 190,0 542,8 In addition to the investments mentioned above, Gerdau concluded still in September the acquisition of 35.98% of Sipar Aceros S.A. (Argentina). This rendered Gerdau with the control of that company. It has also taken over control of Diaco S.A. (Colombia), in which Gerdau now holds a stake of 57.1%. The amounts involved in these operations totaled US$.5 million and US$ 75.2 million, respectively. Indebtedness Net debt on September 30 th was R$ 2.6 billion, 18.8% less than on June 30 th, 05, as a result of the appreciation of the real compared to the U.S. dollar (reducing the dollar-based debt by Brazilian-based companies when converting into reais) and cash generation in the period. Of the total indebtedness, 17.5% was short term (R$ 1.3 billion) and the remaining 82.5% long term (R$ 6.0 billion). Gerdau S.A. concluded, on September 22 nd, the placement of its first issue of Guaranteed Perpetual Senior Securities (Perpetual Bonds), for a total of US$ 600 million. Interests are 8.875% per year, to be paid on a quarterly basis starting December 22 nd, 05. Gerdau S.A. may redeem these bonds on September 22 nd, 10 or from the former date at every interest payment thereafter. This transaction got a Ba1 (stable) rating from Moody s Investor Service, Inc., BB- (stable) from Standard & Poor s and BB- (stable) from Fitch Ratings. The geographical distribution of the bonds was as follows: 46% Asia, 32% Europe, % USA and 2% Brazil. The majority of bond buyers were Private Banking institutions and high net worth individuals. With the goal of extending the average life span of its indebtedness, the perpetual bond contributed substantially in achieving this objective. The Average debt duration almost doubled with this issue, going from 4.0 to 9.1 years. October 12 saw the conclusion of the third issue of a euro commercial paper in the amount of US$ 0 million, with final maturity on October 11 th, 06 and interests of 5.0% per year. Cash and Cash equivalents available on September 30th totaled R$ 4.7 billion, of which R$ 1.7 billion (35.4%) were pegged to foreign currencies, namely the U.S. dollar. 6

7 Indebtedness Short term Domestic Currency - Brazil Foreign Currency - Brazil Companies Abroad Total 1, , ,843.7 Long Term Domestic Currency - Brazil 1, , Foreign Currency - Brazil 2, , ,722.0 Companies Abroad 1, , ,479.8 Total 5, , ,951.2 Gross Debt 7, , ,794.9 Cash & Cash Equivalents 4, , ,947.6 Net Debt 2, , ,847.3 The long term debt payment schedule, including debentures, as of September 30 th, was as follows: Year R$ millions beyond 10 3,436.8 Total 5,979.1 The main Gerdau companies indebtedness indicators at the end of September were the following: Ratios Net debt / Total net capitalization.9% 25.6% 35.9% EBITDA 1 / Net financial expenses 1 (excluding FX and monetary variations) 23.3x.2x 14.3x Gross Debt / EBITDA 1 1.4x 1.0x 1.2x Net Debt / EBITDA 1 0.5x 0.6x 0.8x 1 Lat twelve months On November 3 rd, Standard & Poor s announced the reclassification of currency risk in foreign currency for some Latin American, Asian and Pacific region companies. Gerdau, in particular, it reclassified it from BB- (stable) to BB+ (stable), which means that the company s rating improved two notches in the risk scale for this rating agency and is one notch below investment grade rate. 7

8 Non-Consolidated Data Metalúrgica Gerdau S.A. Dividends for the third quarter will be paid on November 30th and total R$ 92.5 million and are equivalent to R$ 0.75 per share. The year-to-date total adds up to R$ million, that is, R$ 2.26 per share currently issued. The sum of dividends paid in the last four quarters renders a dividend yield (dividends per share of the last four quarters/stock quote on November 4 th ) of 8.6% calculated base don the stock quote of R$ 41. per share as recorded on November 4 th, 05. Period Dividends Per share (R$) Number of shares (million) Payment Data 1 st quarter /24/05 2 nd quarter /24/05 3 rd quarter /30/05 Total At the São Paulo Stock Exchange, Metalúrgica Gerdau S.A. (GOAU) shares moved R$ 2.1 billion in the first nine months of 05, with 94,727 trades in the period. Compared to the same months in 04, this volume increased 47.5% and the number of trades jumped 122.0%. Trades in the period totaled 48.9 million shares, 95.5% more than in the previous year. From January through September 05, trading with preferred shares that are part of the Bovespa index, had a daily trading average of R$ 9.5 million compared to R$ 6.9 million in the same period in 04. BOVESPA (Base 100) Metalúrgica Gerdau S.A. Ibovespa - sep-04 dec-04 mar-05 jun-05 sep-05 Metalúrgica Gerdau S.A. reached a net profit of R$ million in the third quarter, 5.5% less than in the second quarter as a consequence of a lower equity pick up from investments in controlled and subsidiary companies. For the year-to-date, accumulated net income was R$ million, 5.3% less than in the same period in 04. This profit represents R$ 2.62 per share in the quarter and R$ 7.93 per share in the year. On December 30 th, 05, shareholders equity was R$ 3.7 billion, representing R$ per share of net worth. Gerdau S.A. Dividends for the third quarter will be paid on November 30 th and total R$ million and are equivalent to R$ 0.45 per share. year-to-date total adds up to R$ million, that is, R$ 1.38 per share currently issued. The sum of dividends paid in the last four quarters renders a dividend yield of 6.4% calculated based on the stock quote of R$ per share as recorded on November 4 th, 05. Period Dividends Per share (R$) 8 Number of shares (million) Payment Data 1 st quarter /24/05 2 nd quarter /24/05 3 rd quarter /30/05 Total From January through September 05, Gerdau S.A. (GGBR) shares moved R$ 7.1 billion at the São Paulo Stock Exchange. This volume represents an increase of 65.6% compared to the same period in 04. There were million shares traded in 270,878 deals, which surpassed by 153.0% and 92.0%, respectively, the numbers for the first nine moths of the previous year. The

9 daily average trade of preferred shares in the period these shares are part of the Bovespa Index - reached R$ 33.3 million compared to R$ 21.8 million in 04. Gerdau S.A. (GGB) ADRs moved US$ 2.2 billion at the New York Stock Exchange (NYSE), with million shares traded through September this year. Comparing to the same period in 04, there was a improvement of 174.6% in the financial amount and 235.0% in the volume of ADRs traded. The daily average trading reached US$ 11.4 million. BOVESPA (Base 100) NYSE (Base 100) Gerdau S.A. Ibovespa - sep-04 dec-04 mar-05 jun-05 sep Gerdau S.A. ADRs Dow Jones - sep-04 dec-04 mar-05 jun-05 sep-05 At Latibex (Madrid Stock Exchange), 1.3 million Gerdau S.A. (XGGB) preferred shares were traded, moving 13.3 million during the first nine months this year. Compared to the same period in 04, there was an increase of 364.1% and 259.5%, respectively. Net profit at the company reached R$ million in the third quarter, 5.8% lower than that of the second quarter. Net profit for the first nine months of the year was R$ 2.1 billion, 2.6% less than in the same period in 04. This represents a profit of R$ 1.58 per share in the quarter and R$ 4.84 per share year-to-date. On September 30 th, 05, shareholders equity was R$ 7.8 billion, representing R$ per share of net worth. Gerdau Ameristeel Corporation Gerdau Ameristeel (GNA.TO) moved Cdn$ million at the Toronto Stock Exchange in the first nine months of the year and traded 87.1 million shares. These numbers present an evolution of 168.8% and 110.4%, respectively, compared to the same period in 04. The average daily trading volume surpassed the Cdn$ 1.2 million, in 04, to Cdn$ 3.1 million, in 05. At the New York Stock Exchange (NYSE), the company shares (GNA) moved US$ million in the period of January through September 05, a daily average trading of US$ 1.4 million. There were 46.6 million shares traded in the period. It is worth mentioning that the Gerdau Ameristeel started trading at the NYSE in October 04. 9

10 TORONTO (Base 100) NYSE (Base 100) Gerdau Ameristeel Corp. TS 300 Index - sep-04 dec-04 mar-05 jun-05 sep Gerdau Ameristeel Corp. Dow Jones - oct-04 jan-05 apr-05 jul-05 Net revenues for the third quarter adjusted to Brazilian accounting norms reached R$ 2.4 billion, 3.3% lower than in the second quarter. Through September, net revenues accumulated R$ 7.8 billion, presenting an increase of 14.2%, due to the consolidation of the mills acquired abroad in 04. EBITDA reached R$ million in the third quarter this year, 9.3% lower than that of the second quarter. EBITDA margin presented a slight decrease in the period due to the increase in operating expenses, reaching 14.4%. The EBITDA accumulated through September was R$ 1.1 billion, with a margin of 14.7%. Net income for the third quarter reached R$ million, presenting a net margin of 4.9% in the period. Year-to-date, net income has reached R$ million, 38.4% lower than that of the same period in 04. Net margin was 6.1%, in 05, compared to 11.3%, in 04. MANAGEMENT 10

11 GERDAU S.A. - Consolidated BALANCE SHEET Corporate Law - R$ thousands Sep. 05 Jun. 05 TOTAL ASSETS,690,928 18,800,578 Current assets 11,447,709 9,703,021 Cash and cash & equivalents 234,282 2,275 Trade accounts receivable 2,274,572 2,365,677 Taxes recoverable 234, ,648 Temporary cash investments 4,457,2 2,6,856 Inventories 3,829,052 4,067,084 Deferred income tax & other 417, ,481 Long-term receivables 810,977 1,007,523 A/R with related parties 3,751 2,244 Taxes recoverable 152, ,791 Judicial deposits and other 159, ,768 Deferred income tax 495, ,579 Advance payment for acquisition of invest ,141 Permanent assets 8,432,242 8,090,034 Investments 138,646 58,586 Fixed assets 8,236,172 7,991,818 Deferred 57,424 39,630 Corporate Law - R$ thousands Sep. 05 Jun. 05 TOTAL LIABILITIES,690,928 18,800,578 Current liabilities 3,772,441 4,013,661 Loans and Financing 1,259,836 1,304,987 Debentures 6,479 2,597 Trade accounts payable 1,490,213 1,694,436 Taxes payable 349, ,081 Dividends payable - - A/P with related parties 7,659 - Deferred income tax & other 658, ,560 Long-term liabilities 7,259,925 5,666,312 Loans and Financing 4,984,5 3,488,382 Debentures 994, ,411 Deferred income tax & other 1,280,857 1,2,519 Minority Shareholders 1,873,730 1,8,179 Shareholders' equity 7,784,832 7,300,426 Capital stock 5,6,969 5,6,969 Capital reserves 376, ,672 Profit reserves 473, ,576 Retained earnings 1,727,583 1,239,9 11

12 GERDAU S.A. - Consolidated FINANCIAL STATEMENT Corporate Law - R$ thousands 3Q05 2Q05 3Q04 9M05 9M04 GROSS SALES REVENUE 6,167,559 6,454,187 6,284,715 19,550,541 17,564,416 Deductions of gross revenue (1,075,399) (1,018,811) (1,053,889) (3,191,100) (2,861,568) Net sales revenue 5,092,160 5,435,376 5,230,826 16,359,441 14,702,848 Cost of sales (3,725,953) (3,977,012) (3,353,074) (11,922,805) (9,941,552) Gross profit 1,366,7 1,458,364 1,877,752 4,436,636 4,761,296 Operating result (356,411) (473,589) (0,719) (1,272,902) (1,469,811) Selling expenses (127,980) (126,385) (113,066) (371,708) (327,736) General and administrative expenses (305,329) (227,589) (263,061) (825,547) (745,350) Financial income 168,509 15,817 57, ,5 167,7 Financial expenses 21, ,507 66,904 (55,552) (426,279) Other operating income (expenses), net (8,470) 2, ,709 61, ,730 Equity pick-up (104,925) (244,648) (279,747) (327,119) (282,916) Operating profit 1,009, ,775 1,477,033 3,163,734 3,291,485 Non-operating income (expenses), net (5,660) 305,341 (19,805) 299,853 (22,547) Profit before taxes/participation 1,004,136 1,290,116 1,457,228 3,463,587 3,268,938 Provision for income tax (189,028) (275,533) (310,467) (764,955) (643,525) Deferred income tax 2,399 (116,034) 47,032 (165,086) (115,976) Statutory participation (5,907) (5,901) (8,623) (18,801) (23,642) Net Profit for the period 811, ,648 1,185,170 2,514,745 2,485,795 Controlling Shareholders 700, ,610 1,070,799 2,138,941 2,195,561 Minority Shareholders 111, , , , ,234 GERDAU S.A. - Consolidated CASH FLOW Corporate Law - R$ thousands 3Q05 2Q05 3Q04 9M05 9M04 NET INCOME 811, ,648 1,185,170 2,514,745 2,485,795 Equity pick up 104, , , , ,916 Provision for credit risk 1,980 (1,180) 580 (5,808) 8,448 Gain/Loss in fixed asset disposal 5, (3,5) 5,968 6,218 Gain/Loss in disposal/incorporation of investment 88 (305,931) 810 (305,843) 4,371 Monetary and exchange rate variation (1) (195,599) (198,296) (163,526) (355,670) 39,422 Depreciation and amortization 212,325 8, , , ,518 Income tax (13,627) (425) 261, , ,477 Interest paid 134, ,954 89, , ,270 Contingencies/legal deposits (3,793) (12,321) (1,495) (15,597) 14,175 Changes in trade account receivable (19,925) 111,588 (129,467) 118,285 (951,517) Changes in inventories 279,382 (45,815) (500,490) 171,683 (949,199) Changes in trade accounts payable (42,268) (92,8) 188,634 (235,678) 506,344 Other accounts in operating activities 64,113 42,731 (695) 168, ,768 Net cash provided by operating activities 1,338, ,691 1,370,294 3,506,054 2,989,006 Fixed assets acquisitons/ disposals (333,417) (433,244) (215,733) (1,160,805) (702,857) Deferred charges (8,523) (14,232) (4,089) (22,618) (10,4) Investments acquisitions/ disposals (116,329) 287 (11,054) (116,311) (10,333) Cash (applied to) investing activities (458,269) (447,189) (230,876) (1,299,734) (723,594) Fixed assets suppliers 25,932 (21,528) 35 (26,732) (1,576) Working capital financing 1,534,698 (179,423) (231,902) 1,6,030 (3,144) Debentures (,918) (2,494) 41,741 (10,127) 29,829 Proceeds from fixed assets financing 132, ,252 77, , ,128 Payments of fixed assets financing (69,386) (103,846) (164,996) (398,602) (548,856) Interest paid for financing (76,918) (107,773) (110,182) (291,902) (325,750) Inter companies loans (7,527) (6,006) 9,688 (10,343) 7,868 Capital increase/treasury stock (3,712) 537, ,345 (25,673) Dividend/ interest & statutory particip, payment (246,231) (259,657) (245,915) (839,307) (543,366) Cash provided by (applied to) financing activities 1,268,029 16,921 (623,370) 745,065 (1,339,5) Net change in cash 2,148, , ,048 2,951, ,872 Cash balance At the beginning of the period 2,627,131 2,326,286 1,490,128 2,041,968 1,017,006 Effect of exchange rate changes on cash (116,584) (229,846) (58,558) (3,056) 4,7 Opening balance of incorporated companies for the year 32,416 (732) - 38,387 - At the end of the period 4,691,684 2,627,131 1,947,618 4,691,684 1,947,618 Cash composition Temporary cash investments 4,457,2 2,6,856 1,769,0 4,457,2 1,769,0 Cash 234,282 2, , , ,418 (1) Includes gain/loss on derivative instruments Statements relative to business perspectives are based on current expectations of future events and trends that may affect our business. These estimates are subject to risk, uncertainties and suppositions and include, among other, overall economic, political and commercial environment, in Brazil and in the markets we are present in addition to government regulations, present and future. 12